One of the lesser understood issues when it comes to the financial services industry is the manner in which financial advisers are compensated. There is generally a lack of transparency in this area, often due to a lack of voluntary disclosure on the part of the adviser and/or the investment providers.

At the forefront of this topic is the issue of commission-based vs. fee-based advice. Each of these compensation structures has their merits and
their drawbacks. What counts is full disclosure and finding the best solution for the client that is mutually agreed upon.

Currently, in the GCC area, there are some financial products that can only be offered on a commission basis (for instance, a regular savings plan or life
insurance). We will use these when they are the right fit for our clients. Commissions also make it possible for an adviser to assist a client
who is saving more modest amounts whilst generating enough revenue to maintain a functioning advisory practice.

The drawback of commissions is that there's generally a large upfront payment to the adviser, and then nothing else in subsequent years (other than possibly
small trails). That means after the first year, there's very little financial incentive for the adviser to continue servicing the client, other than
the potential for additional business or referrals. Moreover, commissions can potentially (though not always), put the advisor in a sales frame of mind and not an advice frame of mind.

From our perspective, the number of hours we put in for our clients is largely the same in year 1, year 4, year 10. So we would prefer to be paid throughout
the many years of a long, trusted partnership as we are still doing the work. That's why we generally prefer fees.

Fee-based service makes a number of differences to the adviser-client relationship. A fee-based adviser is less interested in sales of a particular
policy, and therefore less likely to have conflicts of interest. In fact, their interests are very much aligned with those of their clients.
If they perform badly, the client will no longer pay them. Their success is dependent on the quality of their work. In addition, as a result of having
a steady income stream from fees as opposed to constantly chasing the next sale to close, advisers will potentially have more time to analyse portfolios
and take care of their clients.

One drawback to the fee-based compensation model is that some advisers will serve their clients just enough to not lose them so they earn their fee vs.
delivering excellent service on an ongoing basis. Another is that over the long term, the client may end up paying out more in fees than they would
in charges based on commission. Of course, if the client is with the adviser over the long term, they are no doubt happy with the work being done and
willing to ensure the adviser is fairly compensated.

So how does fee-based compensation work? Fees may be worked out at a fixed hourly rate, a flat annual fee, or as a percentage of the money
invested, generally around 1-1.5% annually. For example, if you invested a lump sum and the average value over the year was $200,000 the annual fee
of 1% would equate to $2,000. In general, the 1% fee is a fixed percentage of assets so that the advisor earns more as your money grows and less as
it decreases (e.g. 1% of $300,000 is $3,000, whereas 1% of $150,000 is $1,500).

In the UK, US, and other Western economies there is a trend to move away from commission-based advice toward fee-based compensation. In the UK,
it is now law – the Retail Distribution Review. The financial services landscape of the GCC is still developing and such practices are not yet in place.
This environment is therefore highly conducive to disreputable advisers abusing the commission-based system. However, there is some evidence
of at least an awareness of the fee-based approach growing in the industry in general.

We take things a step further: we are one of the few teams in the region offering fee-based financial advice and asset management to our clients. Therefore,
we can assure you objective and unbiased service, while affording you the option of not committing to a long-term plan in which you may want to opt
out of later. We expect our clients to be personally committed to their financial well-being, not bound to it by a policy.

To clarify, we offer commission based products as it is sometimes the best or only option available for clients, however, our decisions are entirely
based on fulfilling our clients best interests. Therefore, we will only encourage these products if they are the best fit for clients needs and
circumstances. The key here is honesty and transparency. Our clients will not be hit with any hidden costs or exorbitantly high
front-end load commissions or charges. They will get exactly what they pay for. We are open about our compensation, whatever form it may take.